asciilifeform oldie but goodie: http://www.ribbonfarm.com/2013/01/31/stone-soup-for-the-capitalists-soul/
asciilifeform "You are fair game for hustlers who understand your wealth better than you do."
mircea_popescu i prefer to express that idea in the terms of the converse perspective.
mircea_popescu your wealth is, much like your mistress, always ready to ditch you if you suck.
My view on money is perhaps a little eccentrici. To allow me to explain it, let's take a little detour.
I propose that the correct way to think about money is not in so called "absolute" terms, such as saying "I have a hundred dollars" or "I owe a hundred euros". The proper way to discuss the situation would be as a percentage of all money.
Obviously "a hundred dollars" is a meaningless concept. What matters is the percentage of total instruments of payment this hundred dollars represents. If you own one hundred of the total ten thousand dollars in existence you are very rich indeed - richer than all with the exception of perhaps one or two people in human history. If you own one hundred of countless gazillion you don't really own very much at all, certainly not worth the mention.
Nevertheless, in practice the correct concept (fraction of total) is absolutely never used (perhaps with the exception of occasional references made by me when discussing Bitcoin). The meaningless concept ("absolute" values) is always used. This state of affairs arises from the interplay of two factors :
- It is extremely difficult to calculate fractions. For one, nobody knows exactly how much dollars are there, and not many people know how many dollar-like things there are. Consequently, the sum of all money is exceedingly difficult to calculate. For the other - due to the insane spread of the human race - even a situation of perfect equality would result in everyone's total wealth being a ten billionth sort of fraction, ie 0.00000001%. Then an item costing you a thousandth of your total net worth - such as a kitchen appliance - would be priced at something like 0.00000000001% ? It's simply not practical to have shops listing prices for a can of Coke as 0.0000000000009545%.
- Truth is nobody's friend. Any government, any slave driver and any mafia don out there would muchly prefer paying out "fixed" sums that secretly shift in their true value (as a % of the monetary mass) rather than have to face the music of what things "are really worth". Any citizen, slave or whore'd much prefer thinking of owning something that's "fixed" rather than mutable, if for no other reason then because people are loss averse more than they're benefit driven.
These practical concerns notwithstandingii, it's obviously the case that the true measure of wealth is the percentile rather than the "absolute" value. The richest man on a tiny island (geographical, cultural or otherwise) is still "the richest man" with all the incumbent risks and benefits. Even if poverty reigns supreme in his space and the whole shebang is scarcely worth a hundred dollars, the social relations borne by the state of wealth strictly reflect those same relations borne by that same state of wealth in Manhattan. The gold diggers will still be gold diggers, the corrupt politicians will still be corrupt politicians, other than a different decor the same film is playing out.
And now that we understand this preamble, let's get to the point. Money, in and of itself, is a whole. What it does with its time is that it reallocates itself (or moreover its relative bits) from the hands of the lame to the hands of the cool. So, you're 1% of the world's cool ? Soon enough you'll be holding 1% of the world's money. You're precisely 0% of the world's cool ? Sucks to be you, watch out below.
Against this, there's no insurance. You can try holding on to your "fixed" "absolute" pile of cash, much like you can try putting the mistress in a chastity belt. Money doesn't need to physically leave your clawy grasp, it will just revalue itself so as to bring whatever volume you hold in line with its correct relative value. In this perspective, inflation in the US is not something that can be avoided, and not something that's done by politicians : it's just money reacting to the problem that a lot of it is held by comparatively very lame people. In general inflation is always the companion of societies that used to be cool but aren't anymore.
Pretty far out stuff, huh.———
- As detailed in an older series of articles (Cele doua atot esente), there's two metaphysical essences interacting with the perceptible world. One embodies itself in language. The other embodies itself in money. [↩]
- Bitcoin, of course, resolves many of the problems discussed. It's trivial to know how many Bitcoins there are, for instance. [↩]